In the midst of Venezuela’s hyperinflationary economy, the record is broken again.
With more than two trillion six hundred thousand million Bolivars, the week between October 31st and November 8th, a record was broken again in the amount of Bolivars stranded within the P2P platform in Venezuela, according to the data provided by Coin.dance. The previous record had been located in two trillion three hundred and eighty thousand million Bolivars in the second week of October.
However, regarding the amount of BTC traded, the figure is not remotely close to the record number and, in fact, it is the second worst week within this line with only 457 Corona Millionaire mobilized, only surpassing the week of October 25 to October 30, where 328 Bitcoin were traded, all according to the same data from Coin.dance.
More bolivars printed in 2020
To try to understand why the week with the highest amount of bolivars transacted coincides with the second worst week in terms of the amount of BTCs operated, it is necessary to do a review of the bolivar.
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With data from the Central Bank of Venezuela we can observe that in the last week of October the Venezuelan economy saw an injection of monetary liquidity of 10.75%, which would be the highest that has been done so far in 2020 according to statements by the Venezuelan research firm Econometrica. With the last monetary injection, the monetary mass of the Bolivar was valued at two hundred seventy seven trillion six hundred twenty nine thousand million Bolivars.
In a comparison between all the existing money supply of the bolivar and the amount of money traded in the last week in LocalBitcoins, we can see that about 0.93% of all the bolivars in the market passed through the P2P platform in one week.
The sudden increase in mining activity suggests that the network is likely to produce another major hardship adjustment.
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A major upward adjustment would come in the face of concern from non-Chinese miners who have been enjoying greater benefits after October’s apparent migration from Sichuan resulted in a negative hardship adjustment of 16%, the second largest downward adjustment in Bitcoin’s history.
Earlier this week, the world’s largest private sector hydroelectric power generator, Russia’s En+ Group, announced that it will launch a crypto coin mining company in partnership with local company, BitRiver.